MicroStrategy’s ultimate ambition is to transform into a leading bitcoin bank with a market valuation of $1 trillion, according to the company’s founder, Michael Saylor, in an interview with Bernstein, as reported by The Block.
The business analytics software provider began acquiring the first cryptocurrency for its balance sheet in August 2020. Its latest purchase of 7420 BTC, reported in September, increased its crypto reserves to 252,220 BTC.
These assets are valued at approximately $15.5 billion, making MicroStrategy the largest corporate holder of bitcoin globally. The company has spent a total of $9.9 billion on acquiring digital currency.
Saylor believes the first cryptocurrency is “the most valuable asset in the world,” which the firm can leverage to transform into a commercial bank or financial company. This involves creating instruments for bitcoin capital markets in the form of its own shares, convertible bonds, and other securities.
In September, Saylor presented data showing that over four years of implementing its digital gold accumulation strategy, MicroStrategy’s stock performance nearly tripled its returns.
#HODL ON pic.twitter.com/ZyBLUvu1d5
— Michael Saylor⚡️ (@saylor) September 30, 2024
The entrepreneur sees a real opportunity to build a company with a 100% premium to bitcoin, reaching a valuation of $300-400 billion, by offering investors the largest options and stock markets.
“And then we will essentially start biting into fixed income segments and just keep buying more bitcoin. It will grow to millions per coin, and we will reach a trillion,” Saylor told Bernstein senior analyst Gautam Chhugani.
The founder of MicroStrategy is confident in the company’s ability to continue attracting debt financing to purchase digital gold. Considering his forecast of an average annual cryptocurrency return of 29%, this will allow the continuation of an arbitrage strategy in the bitcoin capital market.
“I find it much more reasonable to borrow $1 billion in the fixed income market and invest it in bitcoin at 50% annual returns without counterparty risk, than to look for someone willing to pay me 12-14%,” Saylor emphasized.
Contrary to a recent forecast by Benchmark analysts about a potential launch of cryptocurrency lending by MicroStrategy, the entrepreneur dismissed such a scenario. According to him, it is less profitable and riskier than providing tools for indirect bitcoin investment.
“Instead, we believe the better idea is to borrow $10 billion from people who are happy to lend and offer them 100 basis points more in returns, and then invest in bitcoin at 30-50% annual returns,” Saylor said.
Back in February, the founder of MicroStrategy stated that the company would also position itself as a developer of cryptocurrency and products based on it.